Rise in industrial output signals growth

WASHINGTON (Reuters) - U.S. industrial production rose in September for a third consecutive month, Federal Reserve data showed on Friday, suggesting the economy closed out the third quarter with surprisingly strong growth.

The 0.7 percent increase was much greater than the 0.2 percent advance that economists polled by Reuters had expected. The report also showed August's gain was revised up to 1.2 percent from the originally reported 0.8 percent.

For the third quarter as a whole, output advanced at a 5.2 percent annual rate, the first quarterly gain since the first quarter of 2008 and the largest increase since the first quarter of 2005.

The figures will likely reinforce the view that the longest recession since the Great Depression ended in the third quarter. Economists in a Reuters poll released on Thursday pegged the third-quarter growth rate at 3.1 percent.

Capacity utilization, a measure of slack in the economy, rose to 70.5 percent in September from 69.9 percent a month earlier, although it was still 10.4 percentage points below its 1972-2008 average.

(Editing by Theodore d'Afflisio)